Market-leading Earned Wage Access (EWA) platform Paymenow has raised a R250 million (USD14 million) debt facility through Rand Merchant Bank (RMB) in a first-of-its-kind structure for the EWA market in South Africa.
EWA is a financial wellness offering to employees which allows them to access a percentage of their accrued wages before the end of their payroll cycle. It enables employees to unlock funds without the threat of costly loans, and carries the added benefit of building savings and improving financial wellness.
The pioneering agreement comes off the back of Paymenow’s massive growth in the retail, mining, security, cleaning and facilities management industries. Paymenow currently services over 200,000 employees, with growth projections planned to double in the next year.
Deon Nobrega, CEO of Paymenow Group, said, “There is tremendous demand for Paymenow’s services in South Africa, which has 25 million active credit customers, of whom more than 10 million are behind on their payments. As such, the population of people looking for access to liquidity is enormous, and our ability to provide this liquidity without compromising financial health is having a remarkable positive impact. Access to funding, such as through the agreement with RMB, is a gratifying acknowledgement of the strength of our model, and a key enabler of our future growth.”
Most companies have cyclical cashflows which make it difficult to allow employees the flexibility of monthly, weekly or even daily payrolls. Paymenow enables this flexibility by allowing employers to offer their staff a hybrid salary model, assisting those employees who need access to a portion of their salaries – typically for transport, groceries and utilities – as and when they earn it.
RMB is an indirect shareholder in Paymenow by virtue of its shareholding in the DNI Group and has indicated that it is looking forward to continuing to holistically partner with Paymenow to enable Paymenow to grow, innovate and make a positive impact on society through financial education and financial wellness.
In a recent impact report based on independent research conducted amongst 400 Paymenow customers, almost all respondents reported an improvement in their overall quality of life because of Paymenow, and nearly two thirds reported significant improvements. 83% of customers said their ability to save had improved, and 95% customers had been able to reduce borrowing from money lenders and 83% had more cash on hand to deal with emergencies.
Paymenow is the first EWA provider to launch in Namibia and Zambia, with accelerating traction in both the private and public sectors, and intends to scale across additional strategic jurisdictions across Africa, including Lesotho, Ghana, and Kenya.